French and Italian draft budgets pass first test

French and Italian draft budgets pass first test

After France and Italy made further concessions, the Commission concluded that there is no risk of ‘serious non-compliance’ with eurozone budget rules.


10/28/14, 7:48 PM CET

Updated 10/29/14, 9:14 AM CET

The European Commission today (28 October) shied away from escalating its budget dispute with the governments of France and Italy, after the two countries promised to find further savings in their draft 2015 budgets.

Jyrki Katainen, the European commissioner for economic and monetary affairs, said: “I cannot immediately identify cases of ‘particularly serious non-compliance’ which would oblige us to consider a negative opinion at this stage in the process.”

Under eurozone economic governance rules, the Commission could have requested the member states to revise their draft budgets

The Commission had written to France and Italy last week, expressing concern that their draft deficits for 2015 risked “significantly deviating” from EU rules.

Both countries replied on Monday. Pier Carlo Padoan, Italy’s finance minister, outlined various measures that the Italian government would take to save around €4.5 billion of government spending.

Michel Sapin, France’s finance minister, offered to make savings of €3.6bn in 2015. This would be achieved thanks to lower than expected interest rates on its debt, a €1bn rebate from the EU budget, and new measures to clamp down on tax fraud and evasion.

Towards the start of November, the Commission will publish its next round of economic forecasts for each member state.

In mid-November the next Commission will publish opinions on the draft national budgets.

Although the Commission cannot ask member states to revise their budgets, the Commission may use this as an opportunity to highlight concerns and doubts about the governments’ ambitions and calculations.


Nicholas Hirst